Data center TIF lawsuit dismissed by judge

Ozaukee County Circuit Court Judge Adam Gerol last week dismissed a lawsuit challenging the tax incremental financing district created by the City of Port Washington to support a data center campus on its north side.

The suit was filed by Atty. Joseph Cincotta on behalf of Great Lakes Neighbors Inc., a group created by area residents opposed to the Vantage Data Centers Lighthouse Campus, and sought to have the TIF district declared invalid.

But Gerol said last week that the organization “did not prove the facts legally necessary for the case to go forward.”

Gerol went through the lawsuit point by point, stating why the group did not meet the standards necessary for it to continue.

In many cases, he said, the suit provided theories and beliefs rather than facts.

“Innuendo is not fact,” Gerol said in discussing the group’s allegation that the city violated the open meetings law when creating the TIF district. “This just tells me some unnamed people believe there might have been a violation of the law.”

The lawsuit cited a number of reasons the TIF district should be declared invalid, including a contention that the data center property does not qualify as industrial land,  and claims that it fails what is known as the but-for test — whether the development would not occur without the TIF district. Vantage, it argued, does not need a TIF district to develop a data center campus.

In a statement, Great Lakes Neighbors United said the ruling addresses how the case was argued, not whether the TIF district was lawfully created.

“A dismissal of one legal theory doesn’t mean the underlying problems with this TID go away. We built this fight on multiple tracks from the start, and we intend to use all of them,” the group said.

“Other citizen-initiated options remain available to Port Washington residents through state and local agencies. Since the case was first filed 10 months ago, we have continued to gather information and will pursue further action through additional avenues.”

Christine Le Jeune, a founding member of the group, said in the statement, “The court’s ruling does not close the question itself. Residents still deserve a full and transparent accounting of how TID No. 5 was created and administered, and we will continue to pursue it in every way available to us.”

City officials lauded the ruling, with Mayor Ted Neitzke saying, “The court ruling just reaffirms we were acting within the law. We worked with a lot of attorneys to make sure we did just that.”

In a statement, the city touted the benefits of the TIF district, noting that infrastructure projects funded by it will “benefit people in the City of Port Washington, the Town of Port Washington and surrounding areas at no cost to residents. These infrastructure improvements are being paid for up front by Vantage Data Centers, which will then essentially pay itself back with its upcoming payments into the TID.”

Wednesday’s decision was rendered by Gerol just hours after he heard arguments in a case brought by the Metropolitan Milwaukee Association of Commerce and a number of other business organizations seeking to overturn a requirement that the city hold a referendum on future TIF districts that exceed $10 million — another lawsuit stemming from the data center controversy.

MMAC argued that the referendum measure is vague and misleading and will cause irreparable harm to the city and its taxpayers.

Great Lakes Neighbors circulated a petition seeking to have that requirement become law, something approved by city voters in spring.

Gerol said he would issue a decision on that case on Monday, Oct. 19.